Services provided by technology companies to gaming operators cannot benefit from VAT exemption.

The ruling dismisses the appeal filed by Luckia Games, thereby confirming the previous position of the High Court of Justice of Galicia. The dispute centered on whether software and management services provided by third parties to a betting house should be considered an ancillary activity to gaming—and therefore exempt from VAT under Article 20 of the tax law—or whether they should be taxed like any other service.

Luckia argued that these technology companies are essential to the activity and that their remuneration—often variable depending on gross gaming revenue—made them participants in the business, thus justifying the tax exemption. However, the Supreme Court held that “there is no gaming contract or any link whatsoever between those entities, the technology companies, and the participants.”

The “risk” criterion: the key to the ruling The Supreme Court’s central argument for denying the tax exemption is the concept of business risk. According to the judgment, for an activity to benefit from the VAT exemption reserved for gaming, the operator must assume the risk of losing money to the player.

The court points out as an “undisputed fact” that software providers “do not assume any economic risk in relation to the bet.” Even if they charge a variable commission based on results, technology providers never have to pay the player if they win; that obligation falls exclusively on the operator (in this case, Luckia).

“The risk is assumed solely [by the operator], in such a way that those legal relationships meet all the conditions to be considered services provided for consideration,” the judgment states, confirming that such operations must be subject to taxation.